David converses with renowned illustrator and financial philosopher Carl Richards on the abstraction of money, attentional capital, distinguishing risk from uncertainty, and the importance of taking microactions. Show Notes Behavior Gap Your Money: Reimagining Wealth in 97 Simple Sketches by Carl Richards Episode Sponsors Asset Camp Money for the Rest of Us Plus Related Episodes 496: Are You Taking Enough Aspirational Risk? 394: How to Get Better at Risk … [Read more...]
496: Are You Taking Enough Aspirational Risk?
Why we need distinct risk buckets: balancing our natural loss aversion with the allure of opportunities that offer the potential for massive upside. Topics covered include: Show Notes Portfolio Selection by Harry Markowitz—The Journal of Finance, Vol. 7, No. 1. (Mar., 1952), pp. 77-91 Safety First and the Holding of Assets by A. D. Roy—Econometrica, Vol. 20, No. 3 (Jul., 1952), pp. 431-449 The Misbehavior of Markets: A Fractal View of Financial Turbulence by Benoit … [Read more...]
394: How to Get Better at Risk Taking
Five ways we can better take and manage risk. Topics covered include: How likely is it that China will invade Taiwan and the stock market will fall 80%Why experts tend to be humble and don't make specific predictionsWhat is the difference between risk and uncertainty, and between loss capacity and loss aversionWhat factors impact our degree of loss aversion and loss toleranceWhy the economy needs more risk takers rather than rentiers Show Notes Investor Risk Profiling: An … [Read more...]
324: 2020—The Year We Will Never Forget
A review of how the pandemic, financial markets, and government policy evolved in 2020 to make for an unforgettable year. Topics covered include: Show Notes 286: Coronavirus and the Financial Impact of Pandemics 291: How To Survive the Coronavirus (COVID-19) Shutdown Madame Vivelda—Saturday Night Live What Is Risk vs Uncertainty?—Money For the Rest of Us Guide 299: Has the Pandemic Changed You? Personal Saving Rate—Federal Reserve Bank of St. Louis 302: … [Read more...]
What Is Risk vs Uncertainty?
Risk is when the odds or probabilities of future events can be estimated. Uncertainty is when the list of possible future events is unknown, so their odds of occurring cannot be estimated. So how do we make decisions under risk versus uncertainty? ARTICLE TABLE OF CONTENTS (Skip to Section) Risk and InsuranceUncertainty DefinedRisk Versus UncertaintyMaking Decisions Under Risk Making Decisions Under UncertaintyConfusing Risk Versus UncertaintyHow To Make Better DecisionsPodcast … [Read more...]
268: How To Better Manage Risk
What are the three steps to better manage risk and get what you really want. In this episode you’ll learn: Why goods and services that lessen risk tend to cost more.What is the three-step process for assessing and managing risk.Why defining the risk-free option or asset is critical to managing risk.Why immediate annuities are the retirement risk-free option rather than a conservative investment portfolio.What are the two types of risk and how do we mitigate them.What is the … [Read more...]
254: Should You Be 100% Invested In Stocks?
What are the pros and cons of having your entire investment portfolio invested in stocks versus a multi-asset class portfolio? In this episode you’ll learn: What are some investment options if you want to be 100% invested in stocks.What attributes do you need as an investor to have an all stock portfolio.Why it is difficult for active managers to outperform.Why an all Japanese stock portfolio has severely underperformed for 25 years and how it is possible that a U.S. stock portfolio … [Read more...]
138 Plus: Cash Equivalent Funds and ETFs and Key Person Risk
This week December 31, 2016 on Money For the Rest of Us Plus we look at how to analyze the various options for investing cash including money market funds, ultra short bond ETFs, near-term maturity bullet ETFs and short-term bond ETFs. We also explore to manage key person risk for investment vehicles that are highly dependent on one key individual. … [Read more...]
MNY130 Plus: Employer Stock Concentration, Comparing ETF Strategies and U-Haul Bonds
This week on Money For the Rest of Us Plus we look at how to mitigate the risk holding your employer's stock when you don't have a choice. We also compare the differences and similarities between an S&P 500 equal weighted ETF and and U.S. midcap ETF. We discuss how to handle choosing sub-investments in an investment product that you can't get out of. Finally, we look at the U-Haul Investment Club, where individuals can buy bonds backed by moving equipment for as little as $100. … [Read more...]
71: Please Don’t Panic
When the stock market is falling, understanding market history and current conditions can help us make objective, less fear-driven investment decisions. In this episode you'll learn: How the global system of time zones and dates developed.Why stock markets can plummet in value at the opening bell.What is the difference between a market order and a limit order.Why investing based on emotion is risky.Why it is difficult to consistently time market corrections.What is the severity and … [Read more...]
